What counts as a special occasion in your world? Ideally, the most expensive things you spend cash on would be the type of things you only do every once in a while. If you're not careful, those habits can become blurred.
As personal finance site The Resumé Gap explains, treating every day like it's a special occasion can destroy your budget. Spending $100 in a single evening is fine if you only do it once a month. If it's happening every other day, your budget shoots through the roof.
We all know this instinctively, but many of us still don't have a plan for how often "special occasions" should really occur. We just sort of let them happen:
More recently, we met my college friends in Istanbul. For them, it was their only real vacation of the year, warranting the occasional upscale hotel, restaurants with sunset views, and an $US80 two-hour boat cruise along the Bosphorus. Nothing crazy, but many more splurges than during a typical week at home. For us, it was just one week of many in a beautiful new city. We loved their company, but we can't treat every day like a special occasion.
If you set a definition for how often "special occasions" can occur -- say once or twice a month -- and stick to it, you can keep that budget under control. However, if you're defining special occasions (and their associated expenditures) by whenever the people around you are doing things, you'll watch your monthly budget disappear pretty quickly.
When Did My Friends Get So Expensive? [The Resumé Gap]